June 01, 2011 (LBO) - Sri Lanka's Hayleys Exports, a coir fibre products exporter it lost money 2010 despite higher revenues as coir fibre supply shortfall pushed up raw material prices and the exchange rate appreciated.
"The financial performance of the company was affected primarily, due to shortage of coir fibre supplies, which leads to the escalation of the raw material prices," chairman Mohan Pandithage told shareholders.
"The appreciation of the Sri Lankan Rupee during the period had a significant impact to the decline in margins."
The firm however was moving to cut costs. It had moved a 'geo textile' factory to Galle, in the south of the country and low margin sub-contractor operations were closed where raw material supplies were not large enough.
Rileys, associate company making coir and rubber mats had also lost money amid declining orders and exchange rate appreciation. The firm is consolidating operations at one factory in Katana to save costs.
In the year to March group revenues rose to 734 million rupees from 530 million a year ago, though it lost 49 million rupees from a breakeven level a year earlier.
Hayleys Exports said it saw demand in developed economies for coir production in eco-friendly applications. A better coconut crop was expected this year.
"The company would concentrate more on value added fibres to cater to the growing demand of the bedding industry and eco-friendly automobile solutions particularly in China and Europe," Pandithage said.
"The traditional twine business to USA and Japan is robust, and would continue to do well in the future."
source - www.lbo.lk
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